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PRESENTED BY
S.RAMYA
(138010106)
LEATHER INDUSTRY
Leather industry is one of the oldest industries known to mankind. In ancient days
people used skins of animals to protect themselves from cold. They used a process
called tanning which preserves the skin from decay. Today the products are
improved through latest technology. This industry involves products like
footwear, furniture, accessories, clothing; etc.Major share of the leather produced
goes to footwear, a quarter into clothing, 15% into upholstery and the rest into
other products.
Leather industry is a major export earner for many countries Leather Industry in
India, occupies a place of prominence in the Indian economy, in view of its
massive potential for employment, growth and exports. India is the third largest
producer of leather goods in the world after China and Italy. It gives employment
to 2.5 million people and earns $ 2.4mn through exports which constitutes 7% of
India s exports. For decades leather industry was opened to small scale sector in
India. But the post liberalization has opened a plethora of opportunities for the
leather industry in India. In India around 60-655 of the production is done by
small & cottage industries. Production is centered in southern, eastern and
northern India. Production is done in TN, West Bengal, Uttar Pradesh, Punjab,
Karnataka, and Andhra Pradesh. Tamilnadu is the major contributor with 43%.
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1993-94 1994-95 1995-96 1996-97 1997-98 1998-99
• MIRZA INTERNATIONAL
• TATA INTERNATIONAL
• LAKHANI INDIA
• BATA INDIA
• CHEVIOT INTERNATIONAL
• SEAX LEATHER EXPORTS
• SUPERHOUSE LEATHERS LTD
• BHARTIYA INTERNATIONAL
• OTHERS
LAKHANI INDIA: Lakhani India was formed in by the Lakhani group to produce
leather shoes. The company has plants at Haryana. The revenue for the year 2004-
2005 was US$ 28 mn.They have separate shoes for men, women and kids ranging
from Rs 200-3000.
BATA: Bata India was incorporated in 1931 as a private limited company mainly to
produce leather shoes. They have plants at Batanagar (west Bengal), Tamilnadu,
Bangalore which produces finished leather from hides. It also has separate
tanneries at Batanagar and Bihar. It is the first Indian shoe manufacturing unit to
receive ISO 9001 certificate. BATA India is an affiliate of Toronto based BATA
International. Bata India recorded revenue of USD158mn in the year 2003-2004.It
is selected as one of the super brands in India. BATA India started with models
like Hush puppies, Marie Claire which comes out with vibrant colors for
conscious women, Bubble gummers for kids.
SEAX LEATHER EXPORTS: Seax leather export was incorporated in 1994. SLEL
deals in leather goods of all varieties including leather garments, gloves, belts,
industrial leather products, domestic leather goods and all other allied products.
Their sales for the year 2005 was 84 lakh rupees.
SUPERHOUSE LEATHER LTD: From a single tannery in the 80’s producing finished
leather, Super house Group has emerged as one of the biggest players in the
industry. A US $50 million group, Super house Group has 15 units, with
workforce of over 3000 and has its presence in over 35 countries. They are
approved vendors to world-wide brands such as Wal-mart, Filanto, Auchan,
Andre, Shoe Fayre, Hudson Bay, Heckel Securite, Secura and many more. They
have shoe varieties like fashion shoes, safety shoes, cowboy boot and comfort
boots. They have accessories like wallets, handcuffs, bags and belts. They also
have leather garments separately for men and women. Their sales for 2005 was
221 crores and they secured a profit of 5.65 crores.
OTHERS: Apart from these brands there are a lot of small-scale exporters who are
engaged in the sale and export of leather handbags, pouches and wallets, belts,
fashion accessories and garments. Some of them are Super tannery ltd, Euro leder
fashion, Crew B O S products, etc.
SEGMENTATION:
Segmentation mainly refers to the division of markets based on the common needs
and preferences of consumers. Leather industry comprises of products like shoes,
garments, accessories like wallets and pouches, belts, etc. The following are the
various bases on which the Indian leather industry is segmented:
GEOGRAPHIC SEGMENTATION:
In India, leather goods have great demand in North and North-eastern regions
where the temperature goes even below zero during winter season. The use of
leather jackets and shoes is comparatively high in these regions. Major leather
garment manufacturers in India are Bhartiya international, Chevoit international,
superhouse leather industries. They manufacture gloves, jackets, trousers, blazers
etc. Major shoe manufacturers are Bata India, Mirza tanneries and Tata
International.
DEMOGRAPHIC SEGMENTATION:
Indian leather goods market offers a wide variety of goods in varies price ranges.
Bata has shoe varieties ranging from Rs 399 to Rs1199.Low rang varieties like
mover, Bata are priced between 399 – 599. medium range varieties like
Jackson,flexible,Deer are priced around Rs 700 Rs 800.Bata has wide varieties for
r both men and women. Men have varieties like Jackson, Deer, wind,
Mover,.massigio, flexible are some of the varieties for women. They also have
separate varieties for kids under the name ‘Bubble gummers’. High range
varieties starts at Rs 1199.Mirza international has shoes starting from Rs
450.Leather boots range from Rs 1500.
Garment manufactures are also offering wide varieties for men and
women ranging from Rs 2500. Tata international is one of the major players in the
accessories sector. They have a wide variety of leather products. Key holders are
priced at Rs 75, passport cases at Rs 180, coin purses at Rs100, cross shoulder
handbags for ladies Rs 2300, gents Rs 2700 and pencil cases at Rs100.Superhouse
leather ltd also manufactures leather accessories which starts from Rs.100.Other
prominent players in this segment are Seax Exports and Cheviot International Ltd.
The general price range for this category is Rs 75 – Rs 1500.Accessories are
targeted towards both men and women and it includes all income groups.
India has a large and growing consuming class (with an annual income of
US$ 449 or above), that constitutes the largest segment of the population today.
This segment is estimated to constitute nearly 90 million households by 2006-07,
up from just 32.5 million households in 1997-98 – a CAGR of over 12 per cent.
Coupled with relatively lower penetration levels - penetration levels for footwear
has been estimated to be about 60 per cent – this represents a large and growing
market for leather goods.
BEHAVIORAL SEGMENTATION:
Here the market is divided the basis of consumer response to benefits, use
occasions, brands, etc. Leather products are categorized into formals, casuals and
stylish ones with handworks based on the use occasions of the consumers.
CONCLUSION:-
Competitive Advantages
The leather industry can benefit from several characteristics of the Indian market and the
corresponding advantages they offer. Some of these advantages are:
11. Supply side advantages
22. Demand and side advantages
0 3. Regulatory / Policy related advantages
1
Supply side advantages
The Government of India has announced various initiatives to make the leather
industry more competitive. Key policy initiatives include:
1 De-licensing of integrated tanneries that convert raw hides and skins into finished
leather.
2 Several leather goods have been de-reserved from the Small Scale sector.
3 Free import of raw hides & skins, semi-finished and finished leather.
4 Concessional duty on imported machinery and chemicals.
5 Free export of raw hides & skins, semi-finished and finished leather and leather
products.
6
7Questions and answers:-
8
What are typically the methods used for segmenting the markets? Which of
these have already been exploited in the watch market? Which are some of the
typical segments left open?
1
How does one ensure that the segment chosen does not overlap with the
existing segments?
They can conduct a market research and find out the existing brands,
tastes and preferences of consumers .They can also get a better idea of varieties
existing in that segment. Based on this the manufacturer can make his decisions.
Are there novel ways of segmenting the watch market? What are they?